5 Ideas for Building a Leave Management Policy

Workplace absenteeism is expensive. According to a joint 2014 Society for Human Resources Management (SHRM)/Kronos study, paid absences account for 20.9 to 22.1 percent of total payroll. Their calculations didn’t include the direct and indirect costs of planned, unplanned and unpaid absences, which include lost productivity and morale, and temp worker costs. In other words, bad leave management planning isn’t just bad HR policy, it’s bad revenue management.

That’s why building a company and employee-friendly leave management policy requires taking hard data points about attendance and productivity into account, along with the soft skills for personnel management. These five tips on building a leave management policy share a mix of ideas that address both sides of the absentee management equation.

1. Identify your parameters.

This is an issue of hard data. There are laws and regulations, from federal and local, that govern when employees must be given leave, and whether that’s paid or unpaid. There are also labor and employee contract provisions, leave best practices for your industry, as well as employee expectations in a job market that currently favors employees.

A leave management policy does a company no good if the company can’t crunch the numbers to determine what amount of leave it must provide on an employee and company level, and what level of daily absences it can handle while maintaining operations. Having the leave business rules and leave tracking data in a time and attendance system that keeps the company compliant with all its legal, market and financial obligations is paramount.

2. Simplify as much as possible; automate what you can.

Including complicated request processes, long review times, and barriers to leave-related information can doom a leave policy before the voluminous policy can get printed out. Automate what you can to simplify how employees, managers and HR handle leave issues. Empower employees through employee self-service terminals where they look up their own information to see their accruals and submit electronic requests. Streamline the approval/denial for managers by using data dashboards that give them a clear picture of workforce utilization that makes knowing whether a specific request can be granted or denied easy.  That lets you build employee-friendly principles into the leave policy.

3. Contingency plan for common emergencies.

The costliest absences are the unplanned ones. Of course, accidents and emergencies happen. The goal of this contingency planning is to avoid managers and HR having to scramble to fill in position lost time with other worker on short notice. The first part of the contingency planning is defining what constitutes different sorts of unplanned emergencies, so employees know what and when their obligation to notify their manager is triggered. Getting a jury duty notice or a call to come in to a child’s school doesn’t offer as much notice time as maternity leave, but it does offer more than an accident or family death.  In the spirit of simplifying as much as possible, don’t bog your policy down by trying to describe every type of contingency. The key is to make clear to employees what their required notification window is based on timing of the triggering event.

4. Set clear notification and deadline processes.

Clarity and expectation management avoids frustration. The leave policy should clearly state what the deadline obligations are for employees to make requests, especially as regards high request volume times like holidays or back-to-school. It should make clear the deadline obligations of managers and HR to respond. Automate how you provide reminders, which could be via email, push notifications to desktops or employee time clock terminals, or even text messages.

5. Include management training on using leave to avoid employee burnout.

Employee burnout is a leading driver for unplanned absences. Those “mental health” days that never seem to get scheduled, but always pop up. A leave management policy should recognize the truth that burned out employees aren’t happy, productive employees and set requirements regarding how much time off employee must take. Not just “use it or lose it” by the end of the year or letting them exchange vacation days for cash – but a policy of making sure employees who haven’t taken any time off within a certain amount of time, do so.

A 2016 survey by Morar Consulting found that one of the top three drivers to burn-out was too much overtime. Employees literally getting overworked. Your manager-focused leave management policy should guide them on the importance of tracking, managing and limiting employee overtime.

Here’s one last bonus tip for building a leave management policy: Communicate. Communicate. Communicate. The leave management manual should communicate not just what the policy and processes are, but also the goals and reasons behind them. Tools can make it easy to comply with leave policies, but sharing the whys and wherefores helps create buy-in by employees and improves policy adherence. And high leave policy adherence means your company is minimizing the operational and financial impact of employee absences.

While ATS is passionate about time and attendance and excited to support organizations navigate workforce dynamics around timekeeping, we recommend you reach out to your regional and/or local HR chapter for more information on common workplace advice and procedures.